Hydrogen Pioneer Nel ASA Faces Mounting Challenges as Orders Dwindle

The third quarter of 2025 has revealed significant headwinds for hydrogen technology company Nel ASA, with financial results pointing to substantial operational challenges. While management maintains a cautiously optimistic outlook, market participants are questioning whether the hydrogen industry pioneer can navigate the current sector-wide difficulties.

Nel ASA's Q3 2025 financial disclosures paint a concerning picture of the company's current trajectory. Revenue fell to 303 million Norwegian kroner, representing a 17% year-over-year decline. More alarmingly, new order intake plummeted to just 57 million kroner, while the order backlog continued its downward trend for the sixth consecutive quarter, settling at 984 million kroner.

Despite these troubling revenue figures, the company demonstrated some progress in cost management. The EBITDA loss narrowed to 37 million kroner, showing improvement from the 90 million kroner loss recorded during the same period last year. This enhancement stems from aggressive cost-cutting measures that have reduced personnel expenses by nearly 60 million kroner since the beginning of the year.

European Hydrogen Sector Faces Structural Challenges

The difficulties confronting Nel ASA reflect broader challenges within the European hydrogen market. The industry is experiencing what analysts describe as a development crisis, with major projects being delayed or canceled entirely. Production costs remain prohibitively high, while logistical complications continue to hamper growth. The sector appears trapped in a classic chicken-and-egg scenario where supply and demand constraints reinforce each other.

Should investors sell immediately? Or is it worth buying Nel ASA?

Can Nel overcome these market conditions? Company leadership points to two new Front-End Engineering Design (FEED) studies for projects exceeding 100 MW in both Northern and Southern Europe. These initiatives could potentially form the foundation for future large-scale contracts, though the timing of any material orders remains uncertain.

Technological Advancement as Potential Catalyst

With current financial metrics under pressure, Nel is placing significant emphasis on its next-generation alkaline electrolyzer technology. The company plans to make a final investment decision on a new production line before year-end, with commercial launch targeted for 2026 and larger-scale deliveries anticipated to commence in 2027.

From a liquidity perspective, Nel maintains a solid position with 1.76 billion kroner in available funds. However, investors are increasingly concerned about how long this financial runway will last if new orders continue to stagnate. The market awaits clear signals of an order turnaround and early indications of sustainable profitability. The next critical test will come in February 2026 with the release of fourth-quarter results.